The French R&D Tax Credit (CIR) Explained for Foreign Companies

Are you a foreign company conducting R&D in France?

If your group carries out research and development activities in France, you may be eligible for the French R&D Tax Credit (Crédit d’Impôt Recherche, or CIR). This tax incentive remains one of the most generous in Europe, offering up to 30% tax relief on qualifying R&D expenses. However, eligibility and documentation have become increasingly technical, especially after the 2025 Finance Law reforms.

A powerful but complex incentive

The French R&D Tax Credit is a major lever for innovation — but also one of the most closely scrutinized.
Recent reforms have made it essential to master the compliance framework and maintain robust documentation.

Key updates in 2025

• Reduction of the flat-rate overhead coefficient from 43% to 40%.
• End of the “Young Doctors” enhanced rate scheme.
• Exclusion of some expenses (patent costs, non-scientific standardization, technology watch).
• Stricter tax audit procedures, requiring full traceability of all eligible expenses.

In short: the CIR remains an opportunity — but only if your structure in France meets precise legal and accounting standards.

How foreign subsidiaries can qualify for the French CIR

1️⃣ Set up a taxable entity in France

Only entities established and taxable in France (subsidiaries, branches, or permanent establishments) can claim the CIR.
👉 All R&D expenses must be booked and traceable through the French entity.

2️⃣ Provide technical and financial documentation

The French Tax Authority requires a detailed scientific report, in French, following the OECD Frascati Manual methodology.
Foreign groups must adapt their internal R&D documentation — often written in English — to meet French compliance standards.

3️⃣ Anticipate audits and ensure consistency

Incomplete or inconsistent documentation can lead to a reassessment.
The goal is not only to claim the tax credit, but to secure it over time.

Turning the CIR into a competitive advantage

When properly managed, the French R&D Tax Credit can:

• Reduce your R&D costs by up to 30%,
• Strengthen France’s role in your innovation strategy,
• Improve subsidiary profitability through optimized tax planning,
• Enhance collaboration between headquarters and local teams.

The CIR is more than a fiscal tool — it’s a strategic asset for global companies investing in innovation.

Secure your CIR with KPI CONSEIL

At KPI CONSEIL, we assist foreign executives and CFOs in France to secure, document, and optimize their R&D Tax Credit.

Our bilingual financial expertise covers every stage:

• Eligibility review and project validation
• Preparation of compliant scientific and financial reports
• CIR simulation and integration into your group reporting
• Coordination with other funding schemes (CII, Bpifrance, Horizon Europe)

Our mission: turn the CIR into a long-term competitive advantage, fully compliant and aligned with your group’s financial strategy.

Discover KPI CONSEIL’s international finance support offers